27th Apr 2022 09:55
(Alliance News) - Drax Group PLC said Wednesday its full-year earnings will be around the top end of the current range of analyst expectations after reporting a strong system support performance during the first three months of 2022.
The FTSE 250-listed Yorkshire-based power generation firm's shares were 4.3% higher in London on Wednesday morning at 828.47 pence each.
Chief Executive Will Gardiner said: "In the first quarter of 2022 we delivered a strong system support performance as our reliable, renewable electricity continued to support UK energy security and helped to keep the lights on for millions of British homes and businesses."
In the UK, its biomass, hydro and pumped storage asset saw forward contracted power sales grow. At April 22, Drax had 22.2 terawatt-hours of power hedged between 2022 and 2024 on its ROC and hydro generation assets at an average price of GBP78.1 per megawatt hour.
ROC stands for renewable obligation certificate. They are handed to operators of accredited renewable stations.
"We advanced our strategy to increase biomass pellet production, with another 400,000 tonnes of capacity commissioned from two new pellet plants in the US. We also progressed the engineering design work for our UK BECCS project, which will deliver negative emissions for the UK and pioneer BECCS technology at scale. BECCS is a vital carbon removals technology that the UN's IPCC says is needed globally to achieve net zero," Gardiner continued.
Drax is planning to close its two legacy coal plants in September.
It noted it only sources a "small" volume of Russian and Belarussian biomass, but pointed out the removal of Russian biomass cargoes from European supply chains has led to higher prices and lower availability.
Despite this, Drax is guiding for adjusted earnings before interest, taxes, depreciation, and amortization the top of the range of analyst expectations.
By Paul McGowan; [email protected]
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